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HOW BANKING 2.0 WORKS

We Need Banks That Better Serve Our Needs

Banking 2.0 rethinks how banks operate.

Banks would serve as intermediaries to the Federal Reserve. As such, they would still originate and service loans, but the Fed would be their source of capital.

A customer's deposit would no longer be held by the bank itself, it would be lodged with the Fed, eliminating risk for the customer.

The Fed has the authority to create money, so there would no longer be a cost of funds. Interest-free lending would drop the payment on a $400,000 mortgage from $2,147 to $1,111.

Today we pay for our home twice; once to the seller, and then again to the bank. That would no longer be the case with Banking 2.0

Because a bank's source of funds would be the Fed instead of deposits, banks would finance a wider range of projects without risking their customers' funds. Thus, banks could finance start ups, supercharging the economy.

The last recession would never have occurred with Banking 2.0. There was nothing wrong with the core economy; the financial sector was costing us too much.